August 29, 2019

International Trade

Over 4000 tons of food and general cargo have arrived at Guanta port

The local port authority reports that 4303 tons of food and general cargo have arrived at Guanta in 249 containers aboard the CFS PALAMEDES. Cargo includes wheat flour, spaghetti, packaged beans, tuna, along with oil industry equipment and tires. More in Spanish; (Bolipuertos, http://www.bolipuertos.gob.ve/noticia.aspx?id=43618)

 

Oil & Energy

China helps Venezuela boost oil production

China has financed the construction of a new oil blending plant in Venezuela that will boost the country’s flagging oil production by 120,000 bpd, IHS Markit reports, citing an investment of US$ 3 billion, provided by China’s CNPC, PDVSA’s partner in the SINOVENSA venture that will operate the new plant.  SINOVENSA is 49% owned by the Chinese state giant and 51% owned by PDVSA. It currently produces 100,000 bpd in the Orinoco belt. The crude is a medium grade of the Orinoco super heavy that’s then mixed with light crude to make the Merey blend, which, along with other medium grades, are in high demand among Asian refiners. The latest news suggests that China has no intention of changing course about Venezuela no matter what the U.S. decides to do in response. And it seems it is not the only one: India, according to IHS Markit shipping data, still buys Venezuelan oil in defiance of U.S. warnings. The average import rate since June has been about 450,000 bpd. That’s a solid part of Venezuela’s total production, as calculated by OPEC secondary sources. For July, the figure stood at 742,000 bpd. (Oil Price: https://oilprice.com/Energy/Crude-Oil/China-Helps-Venezuela-Boost-Oil-Production.html)

 

Commodities

Venezuela's trees suffer as firewood replaces scarce cooking gas

Chronic shortages of natural gas in the country with the world’s largest oil reserves now mean that cooking fuel is increasingly coming from trees. The growing use of firewood has triggered alarm among activists who say discussions of environmental problems are often eclipsed by diatribes about runaway inflation, economic collapse and a protracted political stalemate. Fires and home construction in the last 40 years have deforested about 10% of Henri Pittier Park, said Enrique Garcia, director of the ecological group Let’s Plant. In addition, he said, the collection of firewood in urban areas can cause respiratory problems from smoke, rising temperatures in cities and increased risk of landslides in poor communities where houses are often built on unsteady terrain. Wood stoves are now a common sight across Venezuela because of the shortage of gas. Tanks used to store, and transport propane are in disrepair for lack of maintenance. In some cases, people burn trash next to a tree to dry it out so the tree can be cut down and used for cooking fuel. Authorities are broadly ignoring legislation that prohibits cutting down trees without permits. Some cities have so little tree cover that those in search of firewood must walk for miles. (https://www.euronews.com/2019/08/29/venezuelas-trees-suffer-as-firewood-replaces-scarce-cooking-gas)

 

Economy & Finance

Venezuela’s cash reserves shoot up from PDVSA despite sanctions

PDVSA’s sales to China just netted Venezuela a cool US$ 700 million, increasing its reserves to US$ 8.8 billion. Most of the US$ 700 million was in the form of the Chinese yuan and comes from back payments made to PDVSA for its crude oil deliveries to China. The payments had been delayed due to the US sanctions on Venezuela and PDVSA, as both parties struggled to come up with a way to send and receive payments in the face of those sanctions. Venezuela has also sold some crude oil for euros cash via intermediaries. It has also sold gold for euros as well as it tries to make up for lost oil revenue. It took out eight tons of gold in April for sale abroad. Venezuela has seemingly abandoned the dollar trade for its crude oil for fear of running afoul of the US sanctions on the Latin American country. This push away from digital transactions will make it more difficult to track where money is coming from and where it’s going to. (Oil Price: https://oilprice.com/Latest-Energy-News/World-News/Venezuelas-Cash-Reserves-Shoot-Up-From-PDVSA-Despite-Sanctions.html)

 

GAZPROMBANK completes transfer of stake in sanctions-hit lender

GAZPROMBANK said on Wednesday it had completed its handover of a stake in Russian-Venezuelan lender EVROFINANCE MOSNARBANK, which was placed under U.S. sanctions, to Russia’s state property management agency. The United States announced sanctions on EVROFINANCE MOSNARBANK in March for its dealings with Venezuelan state oil company Petroleos de Venezuela SA (PDVSA). (Reuters, https://www.reuters.com/article/us-russia-banks-venezuela-gazprombank/gazprombank-completes-transfer-of-stake-in-sanctions-hit-lender-idUSKCN1VI1ES)

 

Maduro official says remittance platform for Petro is ready to use

National Superintendent of Cryptoactives Joselit Ramírez has announced that crypto remittance platform Patria Remesa is live and functioning. Additionally, Ramírez highlighted his confidence in the platform’s safety, as well as how the Venezuelan cryptocurrency El Petro (PTR) allegedly hedges against economic depreciation. Given the Venezuelan government’s history of not delivering on promises related to the PETRO, COINTELEGRAPH advises readers to approach Ramírez’s announcement with skepticism. (Cointelegraph, https://cointelegraph.com/news/venezuelan-official-says-remittance-platform-for-petro-is-ready-to-use)

 

Politics and International Affairs

U.S. offers amnesty to Maduro, if he leaves power

A top American diplomat said the United States would not prosecute or otherwise seek to punish Nicolás Maduro if he voluntarily left power, despite bringing his country to the verge of economic collapse and humanitarian disaster. Elliott Abrams, the State Department’s special envoy for Venezuela, said he had seen no indication that Maduro was willing to step down. But his offer of amnesty was a message to Maduro after both countries’ leaders described high-level talks that Abrams unequivocally said did not happen. “This is not a persecution,” Abrams said of Mr. Maduro on Tuesday evening in an interview. “We’re not after him. We want him to have a dignified exit and go.” He added: “We don’t want to prosecute you; we don’t want to persecute you. We want you to leave power.” The Treasury Department last year accused Maduro of profiting from illegal drug trafficking in Venezuela but did not recommend charges. The softer, if pragmatic, appeal sharply contrasted with the eight months of sanctions, international isolation and threats by the Trump administration of military intervention against Maduro and his loyalists, who are accused of hoarding power and manipulating elections last year. Opposition leaders in Venezuela have not offered immunity to Maduro, whom they accuse of prospering in a corrupt government that has left many Venezuelans without food, electricity or medical supplies.  “The notion that we are negotiating is just flat-out wrong,” Abrams said. “And the notion that there is a pattern of communication is wrong. There are intermittent messages and I think people would find the very occasional message sent from Washington to be completely predictable: ‘You need to return to democracy. Maduro needs to leave power.’” The comments are likely to soothe Venezuela’s opposition leaders, who have privately said Trump’s statement risked sidelining their own negotiations. A delegation headed by the opposition’s chief political negotiator, Stalin González, traveled to Washington last week to press American officials on the Trump administration’s policy in Venezuela. Abrams said he did not currently see any value in talking directly to the Maduro regime. Abrams maintained on Tuesday that the United States would not lift sanctions against Venezuela unless Maduro steps down. Abrams said the Trump administration would not support new national elections with an incumbent — either Maduro or Mr. Guaidó — on the ballot. If either man wanted to run for the presidency, Abrams said, he should first leave office to prevent concerns about election tampering by the government. And he predicted that Guaidó would formally close the negotiations by Oct. 1 to prevent them from dragging on without resolution. “It’s pretty clear that he has not yet reached the conclusion that it is hopeless,” Abrams said, adding: “He may reach that conclusion tomorrow.” Any offer of amnesty by the United States would have limits. A White House official has previously told The New York Times that the Trump administration would be unable to remove any federal drugs charges that several of Maduro’s top confidants and relatives face. (The New York Times: https://www.nytimes.com/2019/08/28/world/americas/us-amnesty-venezuela-maduro.html)

 

US Department of State announces the opening of the Venezuela Affairs Unit (VAU), under the leadership of Charge d’Affaires James Story. The VAU is the interim diplomatic office of the U.S. Government to Venezuela, located at the U.S. Embassy in Bogota‎, Colombia, and has been established with bipartisan support from the U.S. Congress.  The VAU is continuing the U.S. mission to the legitimate Government of Venezuela and to the Venezuelan people.  The VAU will continue to work for the restoration of democracy and the constitutional order in that country, and the security and well-being of the Venezuelan people. The VAU interacts with the government of interim president Juan Guaidó, the democratically elected National Assembly, Venezuelan civil society, and the people of Venezuela.  The United States welcomes the support of the Government of Colombia, which is a further demonstration of its steadfast commitment to democracy and peace in the region. The United States stands with interim President Juan Guaidó, the National Assembly, and the people of Venezuela as they seek to regain their democracy. (State Department: https://www.state.gov/creation-of-the-venezuela-affairs-unit/; VOA: https://www.voanews.com/usa/us-sets-diplomatic-mission-venezuela-colombia; Reuters, https://www.reuters.com/article/us-venezuela-politics-usa/u-s-opens-venezuelan-diplomatic-office-in-colombian-capital-idUSKCN1VI1Y9)

 

Venezuela's Guaidó names shadow cabinet to help oust Maduro

Venezuela’s interim president Guaidó named a new shadow cabinet on Wednesday, launching the latest phase of his campaign aimed at forcing Nicolas Maduro from power.  The new team — including heavyweight opposition figures Leopoldo Lopez and Julio Borges — will be dedicated to preparing for a transitional government and new elections, said Guaidó, who claimed presidential powers in late January as head of the National Assembly, saying Maduro's election last year was a fraud. Guaidó's so-called interim government functions more tangibly outside of Venezuela than at home.  Guaidó said he's calling on his political mentor Lopez to serve as general coordinator, though Lopez has lived in the Spanish ambassador's home in Caracas for protection since launching a failed military uprising with Guaidó on April 30.  Opposition lawmaker Borges, who lives in exile in Colombia, will oversee Guaidó's foreign relations, and other members of his team will deal with economic development, asset recovery and human rights. (VOA: https://www.voanews.com/americas/venezuelas-Guaidó-names-shadow-cabinet-help-oust-maduro)

 

Venezuela condemned by OAS for 'systematic' rights abuses

The Organization of American States passed a resolution Wednesday condemning "grave and systematic" human rights abuses in Venezuela and demanded an independent investigation. The regional security body, which comprises every country in the western hemisphere but Cuba, passed the resolution by a 21 to 3 vote. Seven members abstained and three were absent for the vote. The resolution echoed charges of torture, extrajudicial killings and force disappearances made last month against Venezuela's leftist regime by UN human rights chief Michelle Bachelet. It condemned "the grave and systematic violations of human rights in Venezuela, including the use of torture, illegal and arbitrary detentions, extrajudicial executions, forced disappearances and the denial of the most basic rights and necessities, especially those related to health, food and education." It also called for "an independent, exhaustive and credible investigation" to bring the perpetrators to justice and demanded that Venezuela grant "immediate and unhindered" access to the Inter-American Commission on Human Rights. The resolution was presented by Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, the United States, Guatemala, Paraguay and Peru. (France24: https://www.france24.com/en/20190828-venezuela-condemned-by-oas-for-systematic-rights-abuses)

 

Maduro says dialogue only way to overcome political deadlock

Dialogue is the only means to overcome political deadlock in Venezuela, Nicolas Maduro told Xinhua in an exclusive interview. He said he has proposed the idea of a "permanent negotiating table" between the ruling socialist party and the opposition, as dialogue has resumed after the government side briefly walked away from the talks to protest stepped-up U.S. sanctions. "I have proposed creating a permanent mechanism for dialogue, a permanent negotiation table, which is capable of withstanding any storm, any difficulty, any situation -- dialogue, dialogue for peace," he stressed. Maduro said he has also proposed that the two sides discuss the main problems facing Venezuela and "seek agreed-on, shared solutions." "I can report that we have resumed contact with the government of Norway, there have been several meetings, we have resumed contact with the representatives of the Venezuelan opposition," Maduro said. He expressed optimism that "in the next few days, we will announce good news about the dialogue process." "They have done us harm -- and that's how I am denouncing it to the world -- they have done great harm to the quality of life, to the living standards of the Venezuelan people, but we are in a condition to continue moving forward despite these attacks," said Maduro. (XINHUANET: http://www.xinhuanet.com/english/2019-08/29/c_138348004.htm)

 

Venezuela's political crisis talks 'not working,' says Guaidó

Venezuela's interim president Juan Guaidó admitted on Wednesday (Aug 28) that talks with the Maduro regime aimed at resolving the country's political crisis "aren't working." The two sides are deadlocked with Guaidó demanding Maduro's resignation and the government insisting the United States lift sanctions that it blames for the country's crippled economy. "At the moment there's no date to restart the mechanism mediated by the kingdom of Norway until we achieve something concrete to approach a solution," said Guaidó. He said that if the government is using the talks simply to boost its image "that serves no purpose for the Venezuelan people." (Channel News Asia: https://www.channelnewsasia.com/news/world/venezuela-s-political-crisis-talks--not-working---says-Guaidó-11850808)

 

Cuba asks Canada to help end U.S. sanctions on Venezuela

Cuban Foreign Minister Bruno Rodriguez urged Canadian counterpart Chrystia Freeland on Wednesday to help end U.S. sanctions on Venezuela in their third meeting since May on this country’s political and humanitarian crisis. Canada, a neighbor and NATO ally of the United States, also has long-standing good relations with Cuba, raising hopes it could serve as a mediator in the Venezuelan crisis. U.S. Vice President Mike Pence called on Canada in June to do more to engage directly with Cuba over what he called its “malign influence” on Venezuela. The Canadian Foreign Ministry said in a statement that Rodriguez and Freeland agreed that senior officials would stay in contact and continue to exchange views over Venezuela. (Reuters: https://www.reuters.com/article/us-venezuela-politics-cuba-canada/cuba-asks-canada-to-help-end-us-sanctions-on-venezuela-idUSKCN1VJ02G; Bloomberg, https://www.bloomberg.com/news/articles/2019-08-28/trudeau-envoy-presses-cuba-to-mediate-in-venezuelan-stalemate)

 

Venezuelans Enter Ecuador from Colombia via Secondary Route

About 1,400 Venezuelans crossed over the weekend from Colombia into Ecuador via the San Miguel Bridge, a secondary route linking the two countries, before new visa rules took effect, officials said Monday. The Venezuelans waited under the hot sun to enter Ecuador before the new visa requirements took effect on Monday.
EFE reporters confirmed that hundreds of Venezuelans waited at a CEBAF binational border service processing center in San Miguel, a city in Putumayo province. The Colombian immigration service said more than 11,000 Venezuelans left the country over the weekend, heading into Ecuador via the Rumichaca International Bridge, the main binational border crossing. Colombian immigration service officials told EFE that 103 people arrived after midnight in San Miguel with plans to enter Ecuador, which started accepting applications for humanitarian visas on Monday. Officials from the two countries started talking about allowing the Venezuelans to enter Ecuador and 83 have been admitted so far. (Latin American Herald Tribune, http://www.laht.com/article.asp?ArticleId=2482567&CategoryId=10717)

 

U.S. to pay for thousands of doses of HIV drugs for Venezuelan migrants

The United States said on Wednesday it will provide thousands of doses of HIV medication to treat Venezuelans in Colombia as part of regional efforts to manage care for millions of migrants fleeing the crisis-hit nation. U.S. Health and Human Services (HHS) Secretary Alex Azar told Reuters about the decision in a phone interview following a meeting this week of health officials from 10 countries in the Colombian border city of Cucuta. The officials agreed to various measures meant to help the more than 4 million Venezuelans who have left home amid widespread shortages of food and medicine. (Reuters, https://www.reuters.com/article/colombia-usa-health/u-s-to-pay-for-thousands-of-doses-of-hiv-drugs-for-venezuelan-migrants-idUSL2N25O1DV)

 

Venezuelan migrant who sings for tips gets shot at stardom after chance meeting

When Mexican singer Mario Domm overheard a Venezuelan migrant crooning Domm’s own song in exchange for coins outside a restaurant in Bogota, Colombia, he was moved to tears by the young man’s powerful voice. Now Domm is helping the singer, 22-year-old Alexander Beja, pursue his dream of musical stardom. Beja is one of 1.4 million Venezuelans now living in Colombia, after fleeing a deep political and economic crisis in their home country that has caused long-running shortages of food and medicine. The young singer arrived in Colombia last year and began to sing regularly on the streets of northern Bogota, in hopes of earning what money he could. On the day last month when he was overheard by Domm, Beja was singing a tune called “Venezuela.” “He had a voice like a bazooka,” said Domm, who founded the pop group Camila in 2005. “He has to use it.” (Reuters, https://www.reuters.com/article/us-venezuela-migration-colombia-music/venezuelan-migrant-who-sings-for-tips-gets-shot-at-stardom-after-chance-meeting-idUSKCN1VH1KL)

 

The following brief is a synthesis of the news as reported by a variety of media sources. As such, the views and opinions expressed do not necessarily reflect those of Duarte Vivas & Asociados and The Selinger Group.